Molina Healthcare (MOH) to Get New Medicaid Contract in Iowa
Molina Healthcare, Inc. MOH recently announced that the company is likely to be awarded a Medicaid managed care contract by the Iowa Department of Health and Human Services. The health department had issued the request for the proposal on Feb 17.
MOH’s Iowa health plan is likely to commence on Jul 1 next year. It has a four-year contract duration that can be extended for four additional years. Iowa has around 850,000 Medicaid beneficiaries who will be provided coverage by three managed care organizations, including MOH. Molina Healthcare’s latest contract win follows last week’s contract win in California.
The California Department of Health Care Services decided to award Los Angeles and Sacramento counties’ contracts to Molina Healthcare instead of a bigger organization like Centene Corporation CNC. Los Angeles is a significant win and is mentioned as the “crown jewel” by Wells Fargo. Molina Healthcare’s new contract wins in different states are major positives for the company. This will keep increasing its market share, in turn boosting revenues.
The contract wins are crucial for MOH, given the fact that it expects to lose around 50% of the 750,000 members it has gained since the beginning of the pandemic. This is expected to lead to a headwind of $1.2 billion in revenues in 2023. It served around 5.1 million at second quarter-end.
Price Performance
MOH shares have jumped 27.2% in the past year compared with the 25.4% increase of the industry.
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Zacks Rank & Key Picks
Molina Healthcare currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space are Hanger, Inc. HNGR and Quest Diagnostics Incorporated DGX, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Hanger’s 2022 bottom line indicates a 17.5% increase from the prior year’s reported number. The consensus mark for HNGR’s 2022 revenues signals an 8.3% year-over-year jump.
The Zacks Consensus Estimate for Quest Diagnostics’ 2022 bottom line has increased 5.1% in the past 60 days. DGX beat earnings estimates in three of the past four quarters and missed once, with the average surprise being 12.1%.
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